BINGHAMTON, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Monday with a Broome County area limo service to resolve allegations it failed to pay tips to drivers.
Coachmaster asked consumers making reservations for transportation services if they would like the driver gratuity to be included on the final invoice, instead of paying the gratuity directly to the driver at the time of service. The company allegedly failed to pay all of the tips to drivers, keeping approximately one-third of the tip amount for its own administrative purposes. Coachmaster allegedly failed to tell consumers that a portion of the gratuity included on the final invoice would be retained by the company.
New York's Labor Law and regulations prohibit an employer from retaining any part of gratuities that are meant for employees.
"Making New York more affordable for the middle class starts with standing up for workers," Schneiderman said. "Employers must not take any portion of their employees' tips. My office will prosecute those who engage in wage theft and fight to protect the hard-earned wages of everyday New Yorkers."
Under the terms of the settlement, Coachmaster will pay $20,000 in restitution to affected employees and a $20,000 civil penalty. The agreement also requires the company to comply with the law in the future.